McEwen Mining(US:MUX)2023-03-13 23:28Production and Sales - In 2022, consolidated production included 102,720 ounces of gold and 2,594,604 ounces of silver, with a total gold equivalent of 133,252 ounces[25]. - Revenue from gold and silver sales in 2022 was $47.9 million from the Gold Bar mine, $60.8 million from the Fox Complex, $1.6 million from the El Gallo mine, and $124.8 million from the San José mine on a 49% basis[27]. - The San José mine's production consisted of 55% doré and 45% concentrate, contributing significantly to the overall silver production[24]. Reserves and Resources - Attributable estimated proven and probable gold reserves were 0.3 million ounces at the Gold Bar mine and the San José mine, with 5.1 million ounces of proven and probable silver reserves at the San José mine as of December 31, 2022[33]. - As of December 31, 2022, the company reported proven gold reserves of 5,943 kt at the Gold Bar mine with a grade of 1.07 g/t, totaling 204 koz, and at the San José mine, proven reserves were 251 kt at 5.95 g/t, totaling 48 koz[40]. - The total silver reserves at the San José mine as of December 31, 2022, were 461 kt, with a combined grade of 341 g/t, totaling 5.1 Moz[40]. - The company had attributable estimated measured and indicated mineral resources of 3.3 million ounces of gold and 58.9 million ounces of silver as of December 31, 2022[51]. - The estimated inferred mineral resources included 3.3 million ounces of gold and 105.6 million ounces of silver as of December 31, 2022[51]. Mining Operations and Costs - The average ore tonne mining cost was reported at $4.97, with a total processing cost of $5.41 per ore tonne[43]. - The company experienced mining depletion and increased operating costs during 2022, impacting mineral reserves[46]. - The company plans ongoing exploration drilling to better define existing resources and extensions of known veins, which will be reflected in future mineral reserve estimates[50]. Financial Performance - The company incurred pre-tax losses of $80.3 million, $64.2 million, and $153.7 million for the years ended December 31, 2022, 2021, and 2020, respectively, with an accumulated deficit of $1.3 billion as of December 31, 2022[115]. - The company has an outstanding long-term secured debt of $50 million and an unsecured subordinated promissory note of $15 million, with monthly principal payments of $2 million starting August 31, 2023[117]. - The company relies on external funding for capital investments, which may lead to dilution of existing shareholders due to reliance on equity funding[116]. Market and Price Fluctuations - Gold prices fluctuated between $1,629 and $2,039 per ounce in 2022, while silver prices ranged from $17.77 to $26.18 per ounce; as of March 10, 2023, gold was priced at $1,861.25/oz and silver at $20.09/oz[114]. - The mineral reserves estimate for the Gold Bar mine was based on a gold price of $1,650/oz and a silver price of $22/oz[49]. Environmental and Regulatory Risks - The company’s operations are subject to environmental risks, which could lead to significant liabilities and operational disruptions[110]. - The company operates in areas with water scarcity, which poses risks to continuous production and operational demands[171]. - Environmental regulations are evolving, potentially increasing costs and liabilities for the company[172]. Employee and Community Relations - The company had 520 employees as of December 31, 2022, with a significant presence in Argentina, Mexico, and Canada[101]. - Over 93% of U.S. employees are enrolled in the medical benefit plan, indicating strong employee wellness offerings[102]. - The company must develop and maintain productive relationships with local communities to avoid civil unrest and potential operational disruptions[202]. Competition and Market Conditions - The company faces substantial competition in acquiring mineral properties and technical expertise, which may adversely affect its operations[88]. - The competitive landscape in the mining industry is challenging, with limited desirable mineral lands available for acquisition[174]. Political and Economic Risks - A significant portion of revenue in 2022 was generated from operations outside the United States, exposing the company to political and social risks[199]. - The company faces potential disruptions in operations due to political risks and violence in Mexico, particularly related to drug cartels[162]. Corporate Governance and Shareholder Relations - The company has not declared distributions to shareholders since March 2019, and any future distributions will depend on financial conditions and covenants in outstanding debt instruments[141]. - Future issuances of common stock may dilute current shareholders and reduce the market price of the stock[188].